Have you lost the use of your company? Did you remember to file the annual return or annual accounts?
If the answer is yes for the first question and no for the second one, you should start researching how you can strike off your company in different ways.
Strike-off means you want to dissolve your limited company from the register. The intent of this process is to make your company non-existent. You can either do it voluntarily or the registry house will force your company to dissolve.
Here are eight things to consider before your company gets dissolved.
1. Forced Strike-Off
The registrar will send a notice and two formal letters to your registered office. You need to read these letters because the registrar wants to know if the company is active in the market or trading business.
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You need to prepare a reply to these letters as early as possible during business days otherwise your company might get dissolved. You need to provide all the necessary documents including detailed papers of your annual returns and accounts.
You have to act according to the notice and the formal letters. The office of the registrar expects a formal reply from your office. Your company will either be penalized or the registrar might even declare it a strike off company if you fail to act.
These risk factors are :
- You won’t have enough time to sort the assets.
- Won’t have enough time to settle capital shares.
- Your directorial members will become powerless.
- Corporate infrastructure will become useless.
2. Volunteer Strike-Off
You can dissolve your company voluntarily if you don’t see any use for the business. Wanting to take a leave, permanent retirement, or want to divert the focus of your company into different projects can be other reasons also.
In order to dissolve it voluntarily, you must assure :
- Your company has stopped trading for the last three months.
- Your company is not active.
- Your company did not sell any intellectual properties.
- Your company hasn’t sold tangible assets.
- Your company did not change its name.
- The company isn’t subjected to Company Voluntary Arrangement.
- No administrative control of other company properties.
Read the list properly because you need to make sure your company is not doing the listed things for 4-5 months prior. Otherwise, you will lose eligibility for dissolvement.
3. Preparations For the Strike-Off
Make sure you send proper formal letters to all of your company investors, creditors, and other financial partners regarding the dissolution. They have every right to object to your decision. Include all necessary details in your letter for them.
Basic preparation before the dissolvement :
- Close active bank accounts.
- Sort out the creditors.
- Respond to the investors.
- Handle every IP and domain-related papers.
- Review the contracts.
- Check on overdue tax or returns.
Check every active, terminated, or frozen contract carefully. Some contracts may even require direct termination or replacement. The easiest way is to contact the Revenue and Customs office for these things. They will give you all the necessary suggestions.
4. Ownership of Assets and Capital
You must document every asset and company property in your formal account book. You also need to document accessible capital, cash, or other exchangeable currency in hand. Your company will be held liable for mishandling and concealing information.
All of your company assets, properties and cash will become vacant. You won’t have any authority over these things. The Crown will take ownership over it. If you are applying for a dissolve or dissolution, make sure to protect your own properties so that it does not get mixed up with the company assets.
It is against federal jurisdiction if your company starts trading, becomes active or changes the company name because your company just became ineligible for a strike-off.
It is also against federal jurisdiction if you provide misleading or false information and fail to deliver the copy of the formal letters, notice, or applications to the relevant people. All these must be done within seven business days.
If you fail to act accordingly, You will get a maximum penalty of £5,000 or an undisclosed amount of fines if the case is handled in jury court. Any board of directors will get up to six or seven years of jail time for concealing information. Multiple counts of offense will result in fifteen years of jail time.
6. Company Restoration
You can actually restore your company. If the registrar receives a court order, the restoration can be done, but there are certain limitations to this. You are eligible for the restoration for six years from the dissolving date.
The restoration request is not limited to the owner only. The company’s former directors, investors, creditors, or relevant people can also apply for the restoration.
If your company gets restored, it will start working as every other regular company, as if it had never been dissolved.
7. Alternate Methods to Call Off a Strike
This whole process of restoration is lengthy. There are other alternative methods that you can take which will call off the strike.
- Change the name of your company.
- You can start trading.
- Sell-off assets or properties.
The directors have the authority to call off the strike. Send necessary papers to the registry office for the call-off. You might need to pay the one-time processing fee.
Keep in mind, selling-off assets or restarting the company activity is not cheap.
8. Keeping The Company Records
You need to keep your company’s records, statements, drafts, invoices, vouchers, and receipts for at least seven to eight years if it has dissolved.
You also need to keep the employment records and the company’s liability policy for forty years.
Company strike-off is a harsh reality for any business. Make sure to contact a professional for legal advice if your company stands in front of dissolvement. The correct people will guide you towards proper decisions.